06:35 AM EDT, 04/29/2024 (MT Newswires) -- Royal Philips' (PHG) US-listed shares surged early Monday after reaching a $1.1 billion settlement related to personal injury litigation in the US, while the Dutch health technology firm reiterated its full-year comparable sales growth outlook.

The settlement resolves all claims filed in the US over Philips' recalled sleep and respiratory care products, with the payment expected to be made next year and financed from the company's cash flow generation. Philips didn't admit any fault or liability, or that any injuries were caused by its Respironics unit's devices.

The company's shares on the New York Stock Exchange have been down about 9.7% so far this year, but jumped 45% in premarket activity.

Earlier in April, Philips struck a final agreement on a consent decree with the US Department of Justice, representing the Food and Drug Administration, focusing on the improvements it needs to make at its Respironics' business operations in the country. They first reached terms on the decree near the end of January, with Philips suspending the sale of its sleep devices in the US.

"Patient safety and quality is our highest priority, and we have taken important steps in further resolving the consequences of the Respironics recall," Chief Executive Roy Jakobs said in a statement Monday. "The approved consent decree and economic loss settlement, and now the resolution of the personal injury and medical monitoring litigation in the US, are significant milestones and provide further clarity on the way forward for Philips."

The company also agreed to receive a 540 million euro ($578.9 million) payout from insurers to cover liability claims for the recalled respiratory care products. The payment is anticipated to be made this year, with the income recognized in the current quarter, according to the firm.

Philips continues to estimate comparable sales growth of between 3% and 5% for the 2024 financial year, while acknowledging that "uncertainties remain." It also reaffirmed its adjusted earnings before interest, taxes and amortization guidance of 11% to 11.5%.

For the quarter ended March, adjusted earnings advanced to 0.26 euros per share from 0.21 euros the year before. The company recorded a provision of 982 million euros as a result of the settlement, dragging its net loss wider on an annual basis. Sales edged down to 4.14 billion euros from 4.17 billion euros, falling short of the consensus on Visible Alpha for 4.16 billion euros.

Comparable sales rose 2% in the quarter, compared with 6% in the 2023 quarter. Same-store sales in the diagnosis and treatment segment gained 3%, while connected care ticked down 1%. Personal health division comparable sales rebounded to a 3% increase versus a 6% drop last year.

Price: 30.99, Change: +9.92, Percent Change: +47.08